Vietnam increasingly popular for tyre makers
Following the news in late September that Kenda received an investment license for setting up a tire factory in Vietnam, further attention has been cast on both the local tyre market and the country’s attractiveness to foreign tyre manufacturers.
While Kenda is set to invest somewhere between US$160 million and $200 million in the newest factory as well as employ between 4,000 and 5,000 workers, the new plant (located in Giang Dien Industrial Zone in Dong Nai province) is Kenda’s second in Vietname. The first one, which was built with investment capital of $100 million, is in Ho Nai Industrial Zone in Dong Nai province.
Before that in late 2014, Bridgestone Vietnam, a subsidiary of Japanese Bridgestone Group, inaugurated a separate radial tyre factory in Dinh Vu Industrial Zone in Hai Phong City. This $448 million factory is expected to churn out 6,000 tyres a day. However, there are clear plans to ramp up production. According to Bridgestone’s general director Tetuo Kunitake, the factory’s capacity will be raised to 10,000 tyres a day by the end of 2015 and local news sources report that Bridgestone has just announced it will raise the factory’s capacity to 25,000 tyres a day by the first half of 2016 and 49,000 tyres daily by the second half of 2017.
Kumho Tire has injected $100 million more into its operational factory in Binh Duong province to raise the factory’s capacity from 3.3 million to 5 million products a year.
The increased expansion by foreign-invested enterprises has forced domestic manufacturers, including Casumina and DRC, to scale up their production.
In late 2014, Casumina inaugurated a radial tyre factory which has investment capital of $160 million and capacity of 1 million products a year. Prior to that, DRC put into opened a radial factory capable of making 175,000 tyres a year, which is being expanded to 600,000 tyres a year by 2018.
In February 2014, Sailun announced that its Vietnam factory, the firm’s first manufacturing facility outside China, opened on 30 November 2013. The factory is currently expected to supply 7.8 million tyres annually to the Middle East, South East Asia and South America, employing 850 people.
While all this has been going on in the industry, the tyre trade has also been growing. Over 158,000 tyres were sold in 2014, an increase of 43 per cent over 2013, while the figure is expected to reach 200,000 this year – both according to local news reports.